Tax-Free Distributions from IRAs for Charitable Purposes Extended

Tax-free distributions from individual retirement plans for charitable purposes expired at the end of 2011. The American Taxpayer Relief Act extended these tax-free distributions for 2012 and continues them through 2013. The Act allows individuals age 70 & 1/2 or older to distribute from IRAs up to $100,000 tax-free to public charities.

Since 2012 has already come and gone, the Act provides special transition rules. One rule permits taxpayers to recharacterize distributions made in January 2013 as if made on December 31, 2012. The other rule allows taxpayers to treat a distribution made in December 2012 from the IRA to the taxpayer as a charitable distribution, if transferred to charity before February 1, 2013.